Why Imperva, Novatel Wireless, Tesla, and Two Other Stocks Are Making Headlines Today

Traders are focused on the oil rig number today to see if American E&Ps are actively increasing their capex/drilling programs or not. Although a lower number is better, a steady number also signals confidence in the future. A large increase would not be good for the market.

Among the stocks that traders are also focusing are include several big technology names, Imperva Inc (NYSE:IMPV), Novatel Wireless Inc (NASDAQ:MIFI), Tesla Motors Inc (NASDAQ:TSLA), Yahoo! Inc. (NASDAQ:YHOO), and Verizon Communications Inc. (NYSE:VZ). Let’s take a closer look and see how the smart money is positioned in each stock.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

Imperva Inc (NYSE:IMPV) shares have surged by over 20% after Bloomberg reported that the company has in the process drawn interest from big-name companies such as IBM and Cisco in terms of a potential acquisition. Imperva is currently working with famed advisory firm Qatalyst Partner to find a potential buyer, whose bids are due in around two weeks. Paul Singer‘s Elliott Management established a new stake of over 2.3 million shares of Imperva Inc (NYSE:IMPV) during the second quarter and played a part in persuading Imperva’s management to consider selling itself.

Novatel Wireless Inc (NASDAQ:MIFI) stock has spiked after the company announced that it had entered into an agreement to sell its mobile broadband business to T.C.L. Industrial Holdings for $50 million in cash. The closing of the transaction is expected to occur in the first quarter of 2017. In addition, Novatel Wireless intends to undertake a holding company restructuring that will enable it “to streamline the infrastructure of the ongoing organization, make more efficient use of existing management talent, and allow [it] to more closely track the performance of [its] various business units”. Out of the 749 funds that we track, four were long Novatel Wireless Inc (NASDAQ:MIFI) at the end of June.

On the next page, we examine Tesla Motors, Yahoo!, and Verizon Communications.

Although some traders aren’t too optimistic that Tesla Motors Inc (NASDAQ:TSLA) will successfully merge with SolarCity Corp (NASDAQ:SCTY), CEO Elon Musk certainly isn’t giving up. He recently took to Twitter to give investors a preview on how Tesla could work together with SolarCity to deliver a better product. “Aiming for Oct 28 unveil in SF Bay Area of new Tesla/SolarCity solar roof with integrated Powerwall 2.0 battery and Tesla charger,” Musk said.

In addition, Tesla is also in the spotlight for recently filing a lawsuit to allow it to sell directly to consumers in Michigan. Given that Detroit is basically the capital of the status quo automakers, and the status quo strongly dislikes direct-to-consumer sales, it’s not surprising that Michigan has opposed Tesla’s direct-to-customer request so far. The number of funds from our database with holdings in Tesla Motors Inc (NASDAQ:TSLA) fell by three quarter-over-quarter to 36 at the end of June.

Yahoo! Inc. (NASDAQ:YHOO) is in the spotlight after it gave more details into one of the worst hacks in internet history. According to the company, what is likely a state-sponsored actor stole information associated with at least 500 million user accounts in late 2014. That information may have included names, telephone numbers, date of birth, and hashed passwords. Additionally, the company that agreed to buy Yahoo’s internet assets, Verizon Communications Inc. (NYSE:VZ), said that it became aware of the security breach just in the past two days. Currently, Verizon isn’t commenting on what it will do with the new information.

“We will evaluate as the investigation continues through the lens of overall Verizon interests, including consumers, customers, shareholders and related communities. Until then, we are not in position to further comment,” Verison said.

Among the funds we track, 81 and 52 funds were long Yahoo! Inc. (NASDAQ:YHOO) and Verizon Communications Inc. (NYSE:VZ), respectively, at the end of the second quarter.

Disclosure: none